The New China AI Index

The FTSE China A50 Index is becoming an AI hardware-heavy benchmark, with IT nearing Financials as the largest sector. This shift has created an extreme inverted call skew, offering opportunities for call spread structures.

Key Takeaways

• 1.The FTSE China A50 Index has transitioned from a traditional index to a concentrated AI hardware proxy, with IT sector weighting reaching 25.3%.
• 2.A massive 96% of the index's recent rally was driven by just five AI hardware stocks: Zhongji, Cambricon, Hygon, Esptolink, and Foxconn.
• 3.Investors are paying high premiums for far-OTM calls in the FTSE China A50, creating an extreme inverted skew anomaly.

Table of Contents

• The New China AI Index
• The new IT index
• Proper tech
• The China AI convexity trade

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